Europe Flat On Volkswagen, Porsche

Yet another attempt to merge Germany's great auto marques, Volkswagen and Porsche, hit the skids on Monday, after Volkswagen said it had called off discussions to buy its luxury peer. The news was not enough to turn stocks significantly lower during midday trading in Europe, however, as risk-takers crept back in the wake of a strong two-month rally.

The Dow Jones Euro Stoxx 50 index ticked down 0.1%, to 2,361.90 points, during midday trading. Beneficiaries included bank stocks like Lloyds Banking Group and Standard Chartered, up 4.0% in London, and Commerzbank, up 4.0%, in Frankfurt.

Technology stocks also got a lift, thanks to
STMicroelectronics
Chief Executive Carlo Bozotti, who was cited in the press as saying positive trends had started to come through for the semiconductor maker. Shares of STMicro rose 4.7%, to 4.94 euros, in Paris, while software company SAP rose 2.6%, to 30.34 euros ($40.94), in Frankfurt.

The main disappointment was in the autos sector, after
Volkswagen
said on Sunday that
Porsche
was "not ready" for a merger and broke off plans to discuss buying out its controlling shareholder. Porsche is swimming in debt after buying up Volkswagen stock, and a reverse takeover could potentially have saved it from an even costlier deal.

At least Fiat Chief Executive Sergio Marchionne's ambitious dream of uniting Chrysler,
Fiat
and
General Motors'
European operations took a step further, after a meeting between Marchionne and Juergen Ruettgers, governor of North-Rhine Westphalia. Marchionne is said to be looking for Ruettgers' support to acquire GM brand Opel, which has a plant in Westphalia.

Over in India, the definitive victory of the ruling Congress party in national elections put fears of a weak coalition government to rest and sent stocks soaring. The Bombay Sensex jumped 17.3%, to 14,284.21 points.

Oil prices enjoyed a slight lift, with futures in New York up 71 cents, to $57.05 per barrel, and the spot price of European Brent crude up $1.28, to $56.46 per barrel.

In the currency markets, the dollar gained some ground against the euro, rising to 0.7423 euros, from 0.7412, but fell back against the pound sterling, to 0.6554 pounds, from 0.6588.